Can I get an instalment loan with bad credit?

A short term instalment loan is one option to help manage temporary cashflow shortfalls. Just like some people might dip into their overdraft, others may choose to take out a short term loan to bridge the gap to payday. For some people, they might not have the option to choose between different types of credit because their credit score is lower than mainstream credit providers are willing to accept.

However, this doesn’t mean that those people should be excluded from accessing credit. Everyone should have the option to borrow money when they really need to and when their financial circumstances dictate it’s affordable. This is why bad credit instalment loans exist: to allow people with a poor credit history to get a loan when they need to cover an emergency or an unexpected expense.

How do bad credit instalment loans work?

An online instalment loan is like a payday loan: you apply for an amount you need, the lender will review your application and assess the affordability of the loan and your creditworthiness, and then if you are approved, you will generally receive the funds within a few minutes. The process is quick and easy – even if you get declined – so that you’re not left waiting for days for a decision when the reason you need the cash is likely urgent. And because lenders know that you might be applying even if you have a bad credit record, they base their decision on the latest information available to them which includes more than just your credit score. A lot of creditors are now using open banking to create a full and accurate picture of your financial circumstances. This helps support your income and expenditure and in some cases, it means that lenders can approve customers who may have previously been declined.

Where can I find an instalment loan if I have bad credit?

Most bad credit instalment loans are available online and this is the quickest way to apply. There are some high street branches still around, but they are few and far between and it can often take much longer to get a decision – plus, you have to get there in the first place. Applying with an online lender means a simple and fast application form and an almost instant decision. Online, you have easy access to their website to view any and all information before applying, and you can also check out their customer reviews.

Should I use a loan comparison site when choosing a bad credit lender?

Applying online means you can use a loan comparison website to ensure you are borrowing with the cheapest lender for your needs. Clear and Fair is an online bad credit instalment loan comparison site. You put your loan requirements in the calculator and we will list the lenders which provide loans to suit your needs in order from cheapest to most expensive. We can’t promise that you’ll be approved as we don’t review your application ourselves, but we can assure you that the lender at the top of the search results is the cheapest of our lenders.

Are there any alternatives to bad credit instalment loans?

If you have a bad credit history, then the alternative options to an instalment loan are quite limited. However, if you belong to a credit union, you might be able to get a loan though them. You will still have to submit an application and they will conduct affordability and creditworthiness assessments, but they won’t immediately decline you based solely on your credit score. You do have to be a member first, and not everyone is eligible to be a member of a credit union so it’s not a super accessible alternative. There is currently a government backed plan to create more alternatives to high-cost credit as part of their financial inclusion report so if you do struggle to get accepted for credit, there might be more options in the future!